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In case of inferior goods, the income elasticity is

Asked on by | Votes 0 | Views: 30 | Tags: general knowledge     | commerce     | economics     | Add Bounty

In case of inferior goods, the income elasticity is

A).  Zero

B).  Positive

C).  Negative

D).  None


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1 answers

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Answered by on | Votes 0 |

 Negative



In case of inferior goods, the income elasticity is Negative. A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes.

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